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The Shareholder Forumtm

special project of the public interest program for

Fair Investor Access

Supporting investor interests in

appraisal rights for intrinsic value realization

in the buyout of

Dell Inc.

For related issues, see programs for

Appraisal Rights Investments

Fair Investor Access

Project Status

Forum participants were encouraged to consider appraisal rights in June 2013 as a means of realizing the same long term intrinsic value that the company's founder and private equity partner sought in an opportunistic market-priced buyout, and legal research of court valuation standards was commissioned to support the required investment decisions.

The buyout transaction became effective on October 28, 2013 at an offer price of $13.75 per share, and the appraisal case was initiated on October 29, 2013, by the Forum's representative petitioner, Cavan Partners, LP. The Delaware Chancery Court issued its decision on May 31, 2016, establishing the intrinsic fair value of Dell shares at the effective date as $17.62 per share, approximately 28.1% more than the offer price, with definitive legal explanations confirming the foundations of Shareholder Forum support for appraisal rights.

Each of the Dell shareholders who chose to rely upon the Forum's support satisfied the procedural requirements to be eligible for payment of the $17.62 fair value, plus interest on that amount compounding since the effective date at 5% above the Federal Reserve discount rate.

Note: On December 14, 2017, the Delaware Supreme Court reversed and remanded the decision above, encouraging reliance upon market pricing of the transaction as a determination of "fair value." The Forum accordingly reported that it would resume support of marketplace processes instead of judicial appraisal for the realization of intrinsic value in opportunistically priced but carefully negotiated buyouts.


Forum distribution:

Buyout valuation for Dell insiders


Each of the 20 similar SEC filings for individual directors and officers referenced in the article below included the following footnote explanation of the company's buyout valuation for insiders:

Each tendered option was canceled in exchange for the right to receive cash consideration, less any applicable withholding taxes, equal to (a) the number of shares of the Company's common stock underlying the option multiplied by (b) an amount equal to (i) the excess of $13.75 over the per share exercise price of the option if the per share exercise price was $13.05 or less, (ii) $0.70 if the per share exercise price of the option was $13.06 to $15.50, (iii) $0.40 if the per share exercise price of the option was $15.51 to $20.00, (iv) $0.20 if the per share exercise price of the option was $20.01 to $25.00, and (v) $0.10 if the per share exercise price of the option was $25.01 to $50.00. Notwithstanding the foregoing, pursuant to the terms of the offer, if any option holder elected to participate in the offer, in no event would the holder receive less than $300 for each option grant validly tendered and not withdrawn, less any applicable withholding taxes.

For examples of the SEC filings, see


Source: International Venture Capital Post, November 2, 2013 article

Dell Inc pays out executive shares above conversion value

IVC POST | Marc Castro   Updated: Nov 02, 2013 10:34 AM EDT

The directors and top executives of Dell Inc. had received a total of USD59.1 million as part of the USD24.9 billion leveraged buyout from Michael Dell and Silver Lake Management LLC.

Part of the payout includes partial compensation for options that couldn't be exercised because the conversion amounts were over the purchase offer of USD13.75 per share. This was confirmed by documents filed with the US Securities and Exchange Commission that were made public last October 31, 2013.

Of the total of USD42.1 million paid out to executives, about USD11.9 million went to 26 year Dell veteran Jeff Clarke. Clarke runs Dell PC business and is the president of global operations. The company's ten outgoing directors had received USD17 million as a group, with a USD10 million going to Don Carly, former American Airlines CEO who became part of the Dell board in 1992. He also was Dell CFO in 2007 and 2008. 

For his part, Michael Dell had received USD461,752 for the 33,582 shares in his retirement plan that were not included into the newly privatized company. He owns 75% of the new company, which translates to a net worth of USD15.4 billion, according to Bloomberg Billionaire's Index. 

© 2013 IVCPOST. All Rights Reserved.


This project was conducted as part of the Shareholder Forum's public interest  program for "Fair Investor Access," which is open free of charge to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

The management of Dell Inc. declined the Forum's invitation to provide leadership of this project, but was encouraged to collaborate in its progress to assure cost-efficient, timely delivery of information relevant to investor decisions. As the project evolved, those information requirements were ultimately satisfied in the context of an appraisal proceeding.

Inquiries about this project and requests to be included in its distribution list may be addressed to

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